SC directs Centre to consider factors for fixing levy sugar prices

Published: Wednesday, April 23, 2008, 22:32 [IST]

Subscribe to Oneindia News

New Delhi, Apr 23 (UNI) The Supreme Court has ruled that the Centre must take into consideration all the factors, both favourable and unfavourable, to the sugar mill owners, while fixing the price of levy sugar sold through the Public Distribution System (PDS).

The Court passed the judgement after hearing on the fixation of price of levy sugar to be sold to through the PDS, which is meant for the weaker section of the society.

A bench comprising Justices S B Sinha and V S Sirpurkar dismissed the petitions filed by the Union Government and others but allowed the petitions filed by Mahalakshmi Sugar Mills and Govindnagar Sugar Limited and others.

The apex court, in its 42-page judgement, written by Justice Sinha, noted, ''The decision in Malaprabha-II, that while taking into consideration the unfavourable factor, the Central Government cannot refuse to consider the factor which is favourable to the mill owners, assumes significance.

''We say so for two reasons-(1) it is possible that while confining mopping up to the extend of 50 per cent, the fact of additional price paid in terms of clause 5A of the order would be neutrilised or adjusted but the same would not mean that the exercise shall not be carried into effect; and (2) the effect of payment of an extra amount in terms of state advisory price cannot be refused to be taken into consideration.'' The apex court directed the Centre to refix the price of levy sugar for the sugar years 1983-84 and 1984-85, but this order shall be confined only to the parties before the court, including the interveners.

The apex court also said, ''The parties before us are fighting their grievance for more than 22 years. They should not be allowed to go empty-handed.

''We are, therefore, of the opinion that Mahalakshmi has been wrongly decided, whereas, Harinagar has correctedly been decided.'' Under Section 3(3C) of the Essential Commodities Act, read with Section 3(2)(f) of the Act empowers the Central Government to fix compulsary quota of sugar produced by a sugar producer in the manner prescribed by the Central Government, including the price thereof at which the same is to be sold.

It is known as levy sugar, while the rest of the sugar, which can be sold in the open market is known as free sugar. The Government has to take into consideration the manufacturuing cost of sugar, the duty or tax, securing a reasonable return on the capital investment while fixing the minimum procurement price of sugarcane to be paid to farmers.